Decision relative to the petition of Abington Bancorp, Inc., Abington, Massachusetts to acquire Massachusetts Fincorp, Inc., Quincy, Massachusetts
By the Division of Banks
Abington Bancorp, Inc. (the "Petitioner" or "Abington Bancorp"), Abington, Massachusetts has petitioned the Board of Bank Incorporation (the "Board") pursuant to Massachusetts General Laws chapter 167A, sections 2 and 4 for approval to acquire ownership of and control of the stock of The Massachusetts Co-operative Bank, ("Massachusetts Co-operative") Dorchester, Massachusetts through its indirect merger with Massachusetts Fincorp, Inc. ("Massachusetts Fincorp"), Quincy, Massachusetts. The Petitioner is the bank holding company for Abington Savings Bank ("Abington Savings"), Abington, Massachusetts. Massachusetts Fincorp is the bank holding company of Massachusetts Co-operative. The application before the Board is part of a multi-step transaction wherein Massachusetts Fincorp will merge with Abington Acquisition Corp., a newly formed wholly owned subsidiary of Abington Bancorp. The surviving corporation will then merge with and into Abington Bancorp followed by the merger of Massachusetts Co-operative with and into Abington Savings. The merger of the subsidiary banks, Massachusetts Co-operative and Abington Savings, by statute, is subject to the approval of the Commissioner of Banks.
Notice of the application was published and posted as directed by the Board, thereby affording opportunity for interested parties to submit comments. Other standard procedures informing the public of this matter before the Board were implemented. The Board held a public hearing on the petition of Abington Bancorp on August 6, 2002. The stockholders of Massachusetts Fincorp and Abington Bancorp approved the multi-step transaction at meetings held on August 29, 2002. The comment period on the proposed transaction ended September 4, 2002.
The Board has reviewed the application and oral testimony received at the public hearing. That review focused on the statutory and administrative criteria which includes, among other things, whether competition among banking institutions will be unreasonably affected; whether public convenience and advantage would be promoted; and the record of performance under the Community Reinvestment Act ("CRA") by the two involved subsidiary banks. The additional statutory requirements set out in sections 2 and 4 of said chapter 167A were also significant factors in the Board's deliberations on the matter before it. All such requirements are specifically addressed in the application documents.
One such statutory provision requires the Board to have received notice from the Massachusetts Housing Partnership Fund (the "MHPF") that satisfactory arrangements have been made by the Petitioner consistent with statute and the MHPF's various affordable housing loan programs. The Board received notice from the MHPF that arrangements satisfactory to it had been made for this transaction in a letter dated July 19, 2002.
Abington Savings has its main office in Abington with branch offices located in Abington, Brockton, Canton, Cohasset, Halifax, Hanover, Hanson, Holbrook, Hull, Pembroke, Plymouth, Randolph and Whitman. As of March 31, 2002, its holding company, Abington Bancorp, had consolidated assets of $849.3 million. Abington Savings in principally engaged in the business of attracting deposits from the general public and borrowing funds and investing those deposits and funds in various types of loans and securities.
Massachusetts Co-operative has its main office in Dorchester and operates two branch offices located in Quincy and East Milton. As of March 31, 2002, Massachusetts Fincorp had consolidated assets of $123.9 million. The Massachusetts Co-operative's principal business consists of the acceptance of retail deposits from the public in the areas surrounding its three full-service banking offices. Its deposits and funds are primarily invested in mortgage loans secured by residential and commercial real estate.
The Petitioner has submitted materials to address the issue that competition among banks will not be unreasonably affected by the proposed transaction. Much of that analysis is detailed according to various tests used by federal agencies. The analysis demonstrates that consummation of the transaction will not result in undue concentration of banking resources in the specified banking markets in Massachusetts. Traditionally, however, this Board has not limited its review to those previously cited federal standards in its consideration of whether competition will be unreasonably affected. Rather it is the position of this Board to consider a transaction in light of its impact on the citizens, communities and banking structure in the Commonwealth on a community by community basis instead of by variously grouped markets. The Board has noted that there is no overlap in the banking office networks of the subsidiary banks involved in this transaction. Upon review, the Board does not believe the transaction will unreasonably affect competition for the reasons cited as well as the fact that a number of diverse bank and financial institutions will continue to provide competitive deposit and credit services in the affected areas.
The Board has considered whether public convenience and advantage will be promoted by this proposed transaction. The acquisition of Massachusetts Fincorp and the subsequent merger of its subsidiary bank will, according to the application, result in a significantly larger financial institution able to offer a greater variety of products and services than Massachusetts Co-operative. The application and the testimony at the public hearing cited several benefits which will result from the transaction. Such benefits include, among other things, internet banking, corporate cash management services through the internet, non-deposit investment products, including fixed and variable rate annuities and securities, insurance products, including long term care and life insurance, SBA-guaranteed loans and status as preferred lender, greater variety of checking and savings accounts. In addition, added convenience will be attained through increased branch offices and ATMs located in a larger geographic area. It was also stated that the increased lending limit of the combined institution will enable the institution to better serve the needs of small and mid-sized businesses. The Board's review of factors related to public convenience and advantage support approval of the application.
Related to the issue of public convenience and advantage is the record of performance under the CRA by the subsidiary banks which are the parties to this transaction. Such a review for a state-chartered bank includes examination by personnel of the Board as well as analysis of concerns received by the bank's community and its response to those concerns fairly raised. For other institutions, the Board looks to a publicly available descriptive rating and evaluation by a federal or state bank regulatory agency. The Board has noted that the Petitioner's subsidiary bank, Abington Savings, has a "High Satisfactory" rating in its most recent examination of performance under CRA by the Division. The Board has noted that Massachusetts Co-operative has a "Satisfactory" rating. The Board's review of factors related to public convenience and advantage are consistent with approval.
The Board has considered the Petitioner's analysis of "net new benefits" related to the transaction. The term includes initial capital investments, job creation plans, consumer and business services, and commitments to maintain and open branch offices, among other factors. The Petitioner has stated its commitment to continued operation of the Massachusetts Co-operative's existing branch offices, including its current main office in Dorchester's Fields Corner neighborhood, following completion of the acquisition. In addition, the Petitioner states that the acquisition will provide for the offering of a wider range of consumer and business services. The application indicates the Petitioner's intention to continue the efforts of the Fincorp Charitable Trust Foundation (The Foundation was created in December 1998 as part of The Massachusetts Co-operative Bank's conversion from mutual to stock form wherein the bank was authorized to issue up to 5% of the shares issued in the conversion to the Foundation.) a Foundation organized for the purpose of benefiting the community in the form of grants and other assistance.
The financial aspects and any tax consequences from the structure of the transaction were also considered by the Board. Management factors reviewed were also found supportive of approval. Additionally, all other requirements of statute have been met.
The application, supporting documents, and the testimony received at the public hearing have established a comprehensive record on this petition, which has been reviewed consistent with statutory provisions and the policies of the Board. Based on the record of this matter considered in light of all relevant statutory and administrative requirements, the Board finds that public convenience and advantage will be promoted and that competition among banking institutions will not be unreasonably affected and that the record of performance under CRA by the subsidiary banks involved in this transaction are consistent with its approval. Having considered the record established on this application, the Board has found that the applicable statutory and administrative criteria have been met.
In accordance with the findings expressed herein and pursuant to statute, the Board hereby approves the petition and authorizes Abington Bancorp to acquire Massachusetts Fincorp and Massachusetts Co-operative provided that the transaction is completed within one year of the date of this Decision.
| Thomas J. Curry Commissioner of Banks | |
| Alan L. LeBovidge Commissioner of Revenue | Board |
| Shannon P. O'Brien Treasurer and Receiver-General | |
| September 6, 2002 Date |